Runar Haddal Rolls-Royce...USD billion Number of vessels 0 % 20 % 40 % 60 % 80 % 100 % 2005 2007 2009 2011 2013 YTD Source: IHS Fairplay, Rolls-Royce The big picture by yard countries

11/11/2013

1

© 2013 Rolls-Royce plcThe information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc.This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies.

Shipbuilding MarketTrends and outlook – Offshore

Runar Haddal

Vice President Business Intelligence

� Global shipbuilding market value

� Target markets for yards in Norway

� Market shares within target markets

� Offshore market drivers

� Global newbuilding market outlook

� Summary

Content

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2

Methodology and definitionsValue of global shipbuilding production

� ~ 32.000 vessels ordered since 2005

� Actual price statistics from IHS Fairplay

� Data approx. as per September (IMO)

� Estimates where prices are missing

� Based on representative types / sizes

� Elements of uncertainty:

� Differences with regard to equipment

� Regional differences

� Market situation

� Vessel contract year

� Vessel definitions

� Data suppliers and time lag

� Yard = Main Newbuilding Contractor

Definitions and methodology

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3

1. Accommodation

2. Accommodation Platform, semi submersible

3. Accommodation Ship

4. Accommodation Vessel, Stationary

5. AHTS/AHT

6. Air Cushion Vehicle Passenger

7. Air Cushion Vehicle Passenger/Ro-Ro

8. Articulated Pusher Tug

9. Asphalt Tanker

10. Backhoe Dredger

11. Barge

12. Barge Carrier

13. Bitumen Tanker

14. Bucket Ladder Dredger

15. Bucket Wheel Suction Dredger

16. Bulk Cement Carrier

17. Bulk Limestone Carrier

18. Bulk Wood Chip Carrier

19. Bulker

20. Bulker - Great Lakes Only

21. Bulker Great Lakes only / Dumb

22. Bulker Open Hatch

23. Bunker Tanker

24. Buoy & Lighthouse Tender

25. Buoy Tender

26. Accommodation

27. Accommodation Platform, semi submersible

28. Accommodation Ship

29. Accommodation Vessel, Stationary

30. AHTS/AHT

31. Air Cushion Vehicle Passenger

32. Air Cushion Vehicle Passenger/Ro-Ro

33. Articulated Pusher Tug

34. Asphalt Tanker

35. Backhoe Dredger

36. Barge

37. Barge Carrier

38. Bitumen Tanker

39. Bucket Ladder Dredger

40. Bucket Wheel Suction Dredger

41. Bulk Cement Carrier

42. Bulk Limestone Carrier

43. Bulk Wood Chip Carrier

44. Bulker

45. Bulker - Great Lakes Only

46. Bulker Great Lakes only / Dumb

47. Bulker Open Hatch

48. Bunker Tanker

49. Buoy & Lighthouse Tender

50. Buoy Tender

51. Cable Layer

52. Cable Layer / Repair

53. Chemical Tanker

54. Chemical/Oil Tanker

55. Container Ship

56. Crane & Construction

57. Crane Vessel

58. Crane Vessel, non propelled

59. Crew/Supply Vessel

60. Crewboat

61. Crude Oil Tanker

62. Cruise Ship, Inland Waterways

63. Cutter Suction Dredger

64. Deck Cargo Pontoon

65. Deck Cargo Pontoon, non propelled

66. Deck Cargo Pontoon, semi submersible

67. Deck Cargo Ship

68. Dredger (unspecified)

69. Drilling Ship

70. Drillship

71. Exhibition Vessel

72. Fire Fighting Vessel

73. Fishing Vessels

74. Floating Dock

75. FPSO

Vessel types

76. FPSS

77. Fruit Juice Tanker

78. FSO

79. General Cargo Barge, non propelled

80. General Cargo Ship

81. General Cargo/Passenger Ship

82. Grab Dredger

83. Grab Hopper Dredger

84. Heavy Lift Ship

85. Heavy Lift Vessel

86. Hopper Barge, non propelled

87. Hopper, Motor

88. Hopper/Dredger (unspecified)

89. Icebreaker

90. Icebreaker/Research

91. Jack-up

92. Lighthouse Tender

93. Linkspan/Jetty

94. Livestock Carrier

95. LNG Carrier

96. LPG Carrier

97. Maintenance Platform, semi Submersible

98. Mechanical Lift Dock

99. Mooring Buoy

100. Mooring Vessel

101. Multi-Purpose Ship

102. Navy

103. Offshore Construction Vessel, jack up

104. Offshore Support Vessel

105. Offshore Tug/Supply Ship

106. Oil Well Service Vessel

107. Ore Carrier

108. Ore/Oil Carrier

109. Other

110. Other Activities, Inland Waterways

111. Pallet Vessel

112. Passenger Ship

113. Passenger Ship, Inland Waterways

114. Passenger/Container Ship

115. Passenger/Cruise

116. Passenger/Ro-Ro Ship (Vehicles)

117. Passenger/Ro-Ro Ship (Vehicles), Inland

118. Passenger/Ro-Ro Ship (Vehicles/Rail)

119. Pipe Burying Vessel

120. Pipelay Vessel

121. Pollution Control Vessel

122. Pontoon (Function Unknown)

123. Products Tank Barge, non propelled

124. Products Tanker

125. PSV/OSV

126. Pusher Tug

127. Rail Vehicles Carrier

128. Reefer

129. Refrigerated Fish Carrier

130. Replenishment Tanker

131. Rock Laying Ship

132. Ro-Lo

133. Ro-Ro

134. Ro-Ro/General Cargo

135. Ro-Ro/Heavylift

136. Safety Standby

137. Salvage Ship

138. Search & Rescue Vessel

139. Seismic Survey

140. Self-elevating platform

141. Semi-Sub Heavy Lift Vessel

142. Semi-Submersible

143. Sheerlegs Pontoon

144. Shuttle Tanker

145. Sludge Carrier

146. Spent Nuclear Fuel Carrier

147. Storage Tanker

148. Subsea & Construction Support

149. Suction Dredger

150. + another 22 types…

Vessel types

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Shipbuilding ValueValue of global shipbuilding production

The big picture by segment8

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

0

50

100

150

200

250

2005 2007 2009 2011 2013 YTD

Other

Fishing Vessels

Governmental

Offshore Construction

Offshore S&S

Tugs & Workboats

Cruise & Passenger

Offshore E&P

Cargo Carrier

Number of Ships

USD billion Number of vessels

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013 YTD

Source: IHS Fairplay, Rolls-Royce

11/11/2013

5

The big picture by owner region9

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

0

50

100

150

200

250

2005 2007 2009 2011 2013 YTD

Other / NA

America

Norway

Europe

Asia

Number of Ships


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013 YTD


The big picture by yard countries10


0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

0

50

100

150

200

250

2005 2007 2009 2011 2013 YTD

Other

Norway

Germany

Italy

Netherlands

Singapore

Japan

China

South Korea

Number of Ships

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013 YTD


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Target marketsTarget markets for Norwegian yards

Norwegian yards – Orders by vessel type12


0

20

40

60

80

100

120

140

160

0

2

4

6

8

10

2005 2007 2009 2011 2013 YTD

Other

Ferries

Seismic Survey

Fishing Vessels

Anchor Handling

Supply & Support

Construction & Subsea

Number of Ships

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013 YTD


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Other / …

America

Asia

Europe

0

1

2

3

4

5

6

7

8

CSVPSV

AHTSFish

Seismic Ferries

Norwegian yards – Orders by owner region

Vessel

Types

Owner

regions

Majority build for

European owners: ~90%

Norwegian owners:

~75%

USD billion

2005-2013 YTD


� AHTS > 8000 bhp

� PSV > 3000 dwt

� Construction & Subsea (CSV) > 80 m

� Construction / Construction Support

� Oil Well Intervention

� Not including the “heavy/large” end

� Seismic Survey > 8 st

� Ferries 60-180 m

� European owners only

� Fishing vessels > 40 m

� European owners only

� Not including

� Vessels built in US (Jones Act)

� Vessels built in Brazil (Local Content)

Target markets for yards in Norway

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Global target markets for yards in Norway15


0

50

100

150

200

250

300

0

2

4

6

8

10

12

14

16

2005 2007 2009 2011 2013

Seismic Survey

Fishing Vessels

Ferries

Anchor Handling

Construction & Subsea

Supply & Support

Number of Ships

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013 YTD

Source: IHS Fairplay, Rolls-RoyceNOTE: Not including US or Brazilian yards

Global target markets by owner region16


0

50

100

150

200

250

300

0

2

4

6

8

10

12

14

16

2005 2007 2009 2011 2013

Other / NA

America

Asia

Europe

Norway

Number of Ships

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013


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Market sharesMarket shares for Norwegian yards – Target markets

0

2

4

6

2005 2007 2009 2011 2013

OtherMalaysiaSri LankaVietnamSingaporeIndonesia

JapanSouth KoreaPolandNetherlandsChinaNorway

18

PSV > 3000 dwt - Market shares


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Malaysia

Sri Lanka

Vietnam

Singapore

Indonesia

Japan

South Korea

Poland

Netherlands

China

Norway

0

2

4

6

2005 2007 2009 2011 2013

Other / NA

America

Europe

Norway

Asia

USD billion USD billion

Yard countriesYard countries Owner regionsOwner regions

� China is dominating and growing

� Low building costs

� Poor merchant markets

� Growing offshore market in Asia

� Fewer orders from European owners

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10

0

2

4

6

2005 2007 2009 2011 2013

OtherVietnam

PolandSpainIndiaJapanItalyGermanyIndonesiaSingaporeChinaNorway

19

AHTS > 8000 bhp - Market shares


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Vietnam

Poland

Spain

India

Japan

Italy

Germany

Indonesia

Singapore

China

Norway

0

2

4

6

2005 2007 2009 2011 2013

Other / NA

America

Norway

Europe

Asia



� Still a poor market after the boom

� China also ”growing” in this market

� Medium sized vessels in Asia (8’-12’)

0

2

4

6

2005 2007 2009 2011 2013

OtherCanadaMalaysiaPolandFinlandSouth Korea

SingaporeNetherlandsSpainIndonesiaChinaNorway

20

CSV > 80 m - Market shares


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Canada

Malaysia

Poland

Finland

South Korea

Singapore

Netherlands

Spain

Indonesia

China

Norway

0

2

4

6

2005 2007 2009 2011 2013

Other / NA

America

Asia

Europe

Norway



� Norway is still dominating

� Increased attention from Asian owners

� Asian yards increasing shares (China)

� Mainly CSVs 80-119 m in Asia

� Trend towards larger vessels likely

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0

1

2

2005 2007 2009 2011 2013

Singapore

South Korea

Germany

China

UAE

Spain

Japan

Norway

21

Seismic > 8 st - Market shares


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Singapore

South Korea

Germany

China

UAE

Spain

Japan

Norway

0

1

2

2005 2007 2009 2011 2013

Other / NA

America

Europe

Asia

Norway



� Norwegian owners order 50%

� Norwegian yards have 45% share

� Since 2010:

1. Mitsubishi (PGS)

2. Kleven (Sanco, Rieber)

3. Ulstein (Polarcus)

0

1

2

2005 2007 2009 2011 2013

OtherUkraineSouth KoreaFinlandCroatiaAustralia

ItalyTurkeyPolandGreeceSpainNorway

22

Ferries 60-180 m - Market shares

Source: IHS Fairplay, Rolls-RoyceNOTE: European owners only

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Ukraine

South Korea

Finland

Croatia

Australia

Italy

Turkey

Poland

Greece

Spain

Norway

0

1

2

2005 2007 2009 2011 2013

Norway

Europe



� Over 40 European yards since 2005

� Poland and Norway leading 2010-2013

� No orders for Spain after 2008

� Turkey an increasing threat

� Greece is building only for Greece

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0,0

0,2

0,4

0,6

0,8

1,0

2005 2007 2009 2011 2013

Other

Lithuania

Chile

Croatia

Vietnam

France

Spain

Denmark

Turkey

Norway

23

Fishing vessels > 40 m - Market shares


0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Lithuania

Chile

Croatia

Vietnam

France

Spain

Denmark

Turkey

Norway

0,0

0,2

0,4

0,6

0,8

1,0

2005 2007 2009 2011 2013

Europe

Norway


Yard countriesYard countriesOwner regionsOwner regions

� Majority ordered by Norway (50%+)

� Many yards and very fragmented

� Norway mainly building for Norway

� Norwegian owners also going abroad

� Turkey increasing their share

NOTE: European owners only

Market shares by yard country based on value24

0 %

20 %

40 %

60 %

80 %

100 %

2005 2007 2009 2011 2013

Other

Turkey

South Korea

Japan

Poland

India

Netherlands

Singapore

Indonesia

Spain

China

Norway

Source: IHS Fairplay, Rolls-RoyceNOTE: Not including US or Brazilian yards, European owners only for Fish and Ferries

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Market outlookOffshore market drivers

0

20

40

60

80

100

120

0

100

200

300

400

500

600

700

800

1980 1985 1990 1995 2000 2005 2010

Offshore contracting

Oil Price

Connection between oil

price, exploration, number

of profitable fields and the

need for offshore vessels

Oil price as key market driverNumber of vessels $/bbl

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14

0

20

40

60

80

100

120

140

160

180

200

1980 1990 2000 2010 2020

Oil Price Actual

Barcleys Capital

Bernstein Research

JBC Energy

Barcap

IEA

OPEC

IHS

DNB

Capital Economics

$/bbl

• Shale oil / gas?

• Onshore? Iraq?

• Renewables?

• GDP growth?

??

A lot of opinions around future oil price

Offshore and deepwater development28

0

20

40

60

80

100

120

140

160

180

200

1970 1980 1990 2000 2010 2020

Offshore

Onshore

Mn boepd

0

10

20

30

40

50

60

70

1970 1980 1990 2000 2010 2020

Deep

Shallow

Mn boepd

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15

0

200

400

600

800

1000

1200

1980 1985 1990 1995 2000 2005 2010

Discoveries

Start-ups

Average water

depth m

Source: Clarksons

Offshore fields start-ups and discoveries

2008-2012:

60% of oil and gas offshore

discoveries in deepwater

(boe)

Offshore E&P spending is increasing30

0

50

100

150

200

250

300

350

2005 2010 2015 2020

Shallow (>1000'WD)

Deepwater (>1000'WD)

Source: Douglas Westwood

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

2005 2010 2015 2020

$ billion

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Long term floater demand outstrip supply31

0

200

400

600

800

1 000

1 200

1 400

0

50

100

150

200

250

300

350

400

450

500

2005 2010 2015 2020

Rig demand forecast (left axis)

Rig demand actuals (left axis)

Rig supply (left axis)

Number of Floater wells (right axis)

Rig years

Source: Rystad, IHS Petrodata, RS Platou

Number of floater wells

148 new floaters needed by 2022

277

470

62

46

148

29

0

50

100

150

200

250

300

350

400

450

500

Current active fleet

Units under construction for

int. market

Units under construction for

Brazil

Units to be retired (older

than 40)

Additional demand by

2022

Total projected demand 2022

32

Mtoe

Source: Platou, Rystad, IHS Petrodata

11/11/2013

17

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

2000 2002 2005 2007 2010 2012 2015

AHTS/active drilling units Historical Average 1,3

Source: Arctic Securities & ODS Petrodata

North Sea AHTS / rig ratio

Market outlook for FPSOs

0 10 20 30 40 50 60

Brazil

SEA

W. Africa

N. Europe

GOM

Australia/NZ

Meditteranean

SWA/M. East

Other SA mer

Canada

China< 1000 m

1000-1500 m

> 1500 m

34

Number of units

2013-2020

Source: IMA Studies

� Demand for FPUs is sky-rocketing

� 100-140 FPSO orders next 5 years

� Around 200 projects in total

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18

� Increased adoption of subsea technology

� Strong ultra-deepwater growth 2014+

� Shallow water must not be disregarded

� Field development driving growth

� Increased IMR demand

Subsea* markets

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

2005 2010 2015 2020

Vessel Days

Source: Rystad * Vessels between 90 and 160 m

Market outlookNewbuilding markets

11/11/2013

19

Summary

� Very difficult to predict the next peak!

� Some markets will take a short term hit:

� Oversupply a risk for PSVs

� Temporary slowdown for CSVs

� Other markets are picking up:

� The market for AHTS will return, but when?

� Growth in seismic demand

� Replacement need for ferries and fishing vessels

� Solid long term fundamentals for offshore

� Tougher competition for Norwegian yards

� Will also depend on merchant markets

� Still, the market is moving in our direction

� Vessels for advanced marine operations 0

50

100

150

200

250

300

350

2005 2010 2015 2020

Fishing Vessels* > 40 m

Ferries* > 60 m

Seismic > 8 st

CSV > 80 m

AHTS > 12000 bhp

PSV > 3000 dwt

* European owners only

Number of vessels by contract year

Thank you!

Documents

Runar Haddal Rolls-Royce...USD billion Number of vessels 0 % 20 % 40 % 60 % 80 % 100 % 2005 2007 2009 2011 2013 YTD Source: IHS Fairplay, Rolls-Royce The big picture by yard countries